Hospice Tools Guide to Cost and Cap Reporting

There’s a moment for new hospice agencies when the clinical side clicks.

Your team knows how to care for patients.
Admissions make sense.
Plans of care feel steady.

Then someone brings up hospice cost reports and the Medicare hospice cap.That’s when anxiety sets in.

Cost and cap reporting are not clinical problems. They’re operational ones.

This guide explains you need to know to make Cost & Cap reporting predictable.

What Is Hospice Cost and Cap Reporting?

Hospice financial reporting exists to answer two basic Medicare questions:

1. How are hospice dollars being spent?
2. Are Medicare hospice payments staying within defined limits?

Those questions show up as two required federal reports:

• The Medicare Hospice Cost Report (CMS-1984-14)
• The Medicare Hospice Aggregate Cap Report

Both are mandatory. Both are manageable. Neither requires guessing.

The Medicare Hospice Cost Report (CMS-1984-14)

The hospice cost report is an annual filing due five months after your fiscal year ends.

It combines:

• financial data from your accounting system
• payroll and benefits
• patient days and statistics from billing/EMR

It is filed electronically through MCReF, CMS’s cost report portal, and submitted to your Medicare Administrative Contractor (MAC).

Why the Cost Report Matters

CMS and MACs use cost reports to:

• validate reimbursement patterns
• identify audit risk
• support future policy decisions

Missing the cost report—or filing it poorly—can lead to payment suspension and audit exposure.

Filing it correctly turns it into a routine compliance task.

The Medicare Hospice Aggregate Cap Explained

The hospice aggregate cap limits the total Medicare payments per beneficiary for each cap year.

Key facts every hospice admin should know:

• The cap year runs October 1 through September 30
• CMS calculates the beneficiary count using a proportional method
• The official data source is PS&R, not your EMR
• Hospices self-report the cap to their MAC

If your hospice joined Medicare mid-year, the cap is often prorated.

PS&R: The System of Record for Hospice Cap Reporting

PS&R (Provider Statistical & Reimbursement Reports) is CMS’s official record of finalized Medicare claims.

This is important because your billing system shows activity. PS&R shows what CMS finalized.

PS&R often lags internal remittance reports. That is normal. It reflects adjustments, voids, and takebacks.

When numbers don’t match, reconciliation is required.
In audits and MAC reviews, PS&R always wins.

Hospice Startups: PTAN Timing and When Reporting Begins

No PTAN = no Medicare billing.

Once your PTAN is issued and claims begin paying:

• PS&R starts populating
• cap monitoring begins
• cost report preparation begins

If your PTAN is issued mid-year, partial-year reporting and proration apply.

Inpatient Day Limitation (20%)

Separate from the aggregate cap is the inpatient day limitation.

Medicare limits General Inpatient Care (GIP) days plus inpatient respite days to no more than 20% of total Medicare hospice days.

This is not a form or report. It is a monthly management metric to monitor to avoid year-end repayment surprises.

PEPPER and Why Hospices Should Care

PEPPER (Program for Evaluating Payment Patterns Electronic Report) compares your hospice’s billing patterns to peers.

PEPPER is a risk indicator.

• review PEPPER when released
• document that review
• use it to guide internal audits

When questions come later, documentation matters.

Overpayments and Credit Balances

In late 2024, CMS eliminated quarterly CMS-838 credit balance reporting.

What changed:

• Quarterly CMS-838 submissions ended.

What did not change:

• Hospices must still identify and return overpayments within 60 days.

Tracking overpayments remains a compliance obligation.

Hospice Cost and Cap Reporting is manageable when you have:

• a clear calendar
• defined ownership
• step-by-step workflows
• documented reconciliations

Download the Hospice Financial Reporting Playbook

We created a Hospice Financial Reporting Playbook to help administrators and billing teams:

• understand cost and cap reporting in plain English
• navigate PS&R, PEPPER, and MCReF
• handle startup and PTAN timing correctly
• follow clear timelines and checklists

 

Book your demo & find out more about the CHAP Verified Hospice EMR built  for teams like yours!

Check Out More Hospice Tools Insights!   Book Your Hospice Tools Demo Today!